ECC approves tariff hike of up to Rs2.89 for K-Electric

As a relief measure, tariff will be notified after three months

​ Our Correspondent March 27, 2020
The ECC was briefed that the tariff revision would have an impact of Rs1.09 to Rs2.89 per kilowatt-hour on various categories of consumers. PHOTO: FILE

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Thursday approved an increase of up to Rs2.89 per unit in the tariff for K-Electric consumers.

Adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh chaired the ECC meeting at the Cabinet Division.

The economic decision-making body approved quarterly adjustment of K-Electric tariff for the period July 2016 to March 2019. As a relief measure for the people of Karachi amid the coronavirus outbreak and ahead of Ramazan, the ECC gave directives to notify the tariff after three months.

In the meantime, it directed the Finance and Power Divisions to facilitate K-Electric through advance provision of subsidy amounting to Rs26 billion. The ECC was briefed that the tariff revision would have an impact of Rs1.09 to Rs2.89 per kilowatt-hour (kWh) on various categories of consumers.

The Power Division informed the meeting that the National Electric Power Regulatory Authority (Nepra) had decided a tariff increase of Rs4.87 per unit for each category of consumers while taking decision on adjustments for 11 quarters.

It was pointed out that currently on account of provisions of the Nepra Act and applicable policies as well as guidelines, a uniform tariff is applicable to each category of consumers of ex-Wapda distribution companies pursuant to various determinations of Nepra from time to time.

K-Electric-notified tariff was also accordingly aligned. Subsequently, Nepra determined quarterly adjustments in June 2019, September 2019 and December 2019 for the consumers of ex-Wapda companies.

Currently, a consolidated uniform rate in the range of Rs1.09 to Rs2.89 per unit is being charged from various consumers while keeping in view the socio-economic objectives for the specified categories of consumers. The Power Division recommended the ECC that the tariff determined by Nepra should be notified, which would result in subsidy claim of around Rs71 billion up to March 2019 and from the date of notification to the next 12 months the additional estimated subsidy claim would be Rs26 billion.

According to a statement issued by the finance ministry, four technical supplementary grants were approved by the ECC.

These included Rs275 million in favour of the Ministry of Housing and Works for capital outlay on civil works, Rs84.3 million equivalent to $532,152 for NADRA which would be spent on the erstwhile Fata TDP emergency recovery project, Rs5.5 billion for the Sustainable Development Goals achievement programme and Rs5 billion for the National Disaster Management Authority (NDMA) for fighting the spread of coronavirus on an emergency basis.

The technical supplementary grant for the NDMA would be utilised for logistics support and the provision of different types of personal protection equipment against the virus like respirators, face masks, etc.

The ECC formed an inter-ministerial committee that would firm up proposals in a month on an incentive package under the National Electric Vehicle Policy.

The ECC acknowledged the role and efforts made by the Ministry of Climate Change for drawing up incentive proposals for the National Electric Vehicle Policy.

On a summary moved by the Ministry of Energy for the execution of LPG air-mix plant project by Sui gas companies, the ECC decided to continue the operation of two already installed and working plants at Awaran and Bella.

It also approved the installation of four more plants in Gilgit, Drosh, Ayun and Chitral towns where the equipment had already been procured for installation.

Work on other projects of the same nature had been stalled as a huge amount of subsidy was required for both Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL).

It was briefed to the ECC that SNGPL required Rs19.85 billion per annum for the operation of 16 projects and SSGC needed Rs14.47 billion to operate 32 approved projects.

The ECC decided that the Ministry of Energy should engage with the government of Balochistan and implement more efficient projects, which would give maximum benefit to the population of Balochistan within the same amount of allocation and subsidy.

The decision was taken keeping in view the revenue shortfall of SNGPL at Rs143 billion and of SSGC at Rs72 billion as of the end of 2018-19.

The ECC also decided to allocate an additional 5 million cubic feet of gas per day to SSGC. The price of gas will be according to the petroleum policy. 

Published in The Express Tribune, March 27th, 2020.

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